India’s largest mobile wallet service provider Paytm is planning to separate the e-commerce and payments businesses and create a new payment unit called Paytm Payment Bank.
Vijay Shekhar Sharma, co-founder of Paytm’s parent One97 Communications, said the new unit will manage the company’s payments businesses, including existing services like Paytm wallet.
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However, the e-commerce business will continue to operate under One97 Communications brand.
One97 will own less than 40% stake in the new entity, Sharma will hold the majority 51% stake, while remaining stake will be held by another subsidiary of One97.
The company has earmarked $250m investment for the new business that will be registered in next three months, with a new leadership team.
The payments subsidiary expects to recruit about 2,500 new employees and Sharma will search for a new chief executive officer to run it.
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By GlobalDataSharma added: "Overall as a business, we want to reach out to 500 million people with 1 lakh crore of business by 2020.
"Licence brings us the third part of our business model: Pay, Buy and Save. And by savings, I mean that consumer deposits can now come, which will make payments far more seamless as the cash will be immediately available within your wallet."
Paytm has 80,000 merchants on its platform, with plans to reach 100,000 by the year-end as it allows zero-commission listings. It has over 102 million wallets and expects to reach 115 million wallets by December.
